Sainsbury's 3.3% Loan - a guide to what rate you might expect to be offered

Westminster

Obviously there are plenty of people out there complaining (particularly about Sainsbury's as they have the lowest APR but other companies in general) that they get accepted but not as one of the lucky 51% who get the headline rate.

So I thought I would post my experience in case it helps anyone else.

In my case - so not sure if this is a general trend or not - but I found the risk-based pricing seems to be largely similar between the mainstream lenders.

Eligibility
I used the eligibility guide on here to indicate likelihood for acceptance for a 15k loan and got the following:

• 90% for Sainsbury's, Zopa, Cahoot, Santander
• 80% for M&S, HSBC, AA, Hitachi etc etc

What the eligibility guide obviously can't tell you though - is what your interest rate will actually be once you apply.

Soft-search Quotes
So I went and got some 'quotes' from the following:

• Nationwide quoted 7.8%
• Zopa quoted 7.9%
• First Direct quoted 7.9%

Hard search / Application
As Sainsburys don't do rate quotes, I popped in an application on the wild chance that maybe I was their ideal customer .... blah blah and could use the nationwide 0.5% rate-beating promotion to bag a discount on the headline Sainsburys 3.3% rate down to 2.8%.

However, the paperwork arrived a couple of days ago from Sainsburys and they have offered 7.7%

Potential Conclusion
So - the wild leap I am making here, is if you fancy a loan from a major lender, perhaps try some of the lenders that will quote you a rate with a soft-search to get an idea of the ball park rate that your target lender may end up offering once you hit your file with a full credit application.

Final result
Fortunately for me - I was able to pick up a couple of money transfer cards instead:

• 8k limit from Virgin over 32 months with 1.69% fee
• 12k limit from MBNA over 24 months with a 1.89% fee

So instead of the £1782 in interest that Sainsburys have quoted, I am instead paying fees totalling £268.50 for the same amount (albeit with half of the sum over 2 years instead of the 3 years I asked Sainsbury's for).

cheeky

thanks for this good post

Ive applied for a M&S loan, £14k over 7 years for a home improvement. I was approved... Great until the docs came thru - 7.3% apr! Thats £20pm more over 84 months!!!! I aim it make overpayments when i can but thats not the point. Just seems like sharp practices to me...

Will do some soft searches - do you know what the impact is on my credit file if i apply for another loan now after the M&S loan?

Have you links to the money transfer Virgin and MBNA cards??

cheers

DCFC79

cheeky wrote: »

thanks for this good post

Ive applied for a M&S loan, £14k over 7 years for a home improvement. I was approved... Great until the docs came thru - 7.3% apr! Thats £20pm more over 84 months!!!! I aim it make overpayments when i can but thats not the point. Just seems like sharp practices to me...

Will do some soft searches - do you know what the impact is on my credit file if i apply for another loan now after the M&S loan?

Have you links to the money transfer Virgin and MBNA cards??

cheers

Have you googled for the money transfer cards ?

Westminster

The link you are after is here: http://www.moneysavingexpert.com/loans/cut-loan-overdraft-costs

The MBNA rate I got was slightly better than the one listed on MSE.


I would recommend the eligibility checker first.


Also MBNA offer a soft search eligibility checker on their own site.

burlington6

I don't see the issue with loan companies not giving all the customers the low rates.

They don't advertise that all of them will get it and lets face it, most of them who apply will be a bad bet anyway.

I have more of a problem with the public assuming a company, who is there to make a profit, should be forced to lend them money at a certain rate.

Westminster

burlington6 wrote: »

I don't see the issue with loan companies not giving all the customers the low rates.

They don't advertise that all of them will get it and lets face it, most of them who apply will be a bad bet anyway.

I have more of a problem with the public assuming a company, who is there to make a profit, should be forced to lend them money at a certain rate.

I completely agree with you - which is why there was no direct moaning from me about the risk pricing I received.

My post is simply here to maybe allow people to get an idea of what a targeted lender (who does not offer soft-search quotes) would actually end up offering if you proceed to a full application / hard-search.

General advice is always to keep credit applications to a minimum and this may help a scatter-gun approach combined with disappointment.

burlington6

Westminster wrote: »

I completely agree with you - which is why there was no direct moaning from me about the risk pricing I received.

My post is simply here to maybe allow people to get an idea of what a targeted lender (who does not offer soft-search quotes) would actually end up offering if you proceed to a full application / hard-search.

General advice is always to keep credit applications to a minimum and this may help a scatter-gun approach combined with disappointment.

Completely agree, my post wasn't directed at you.

It's more to those we get on here on a daily basis who think it's their ''right'' to get a loan at a certain rate

Westminster

That's us both squarely on the same page then :-)

ispookie666

I did apply for Sainsbury 3.5% loan (8months ago)when their minimum was the same. Was consolidating another loan of 7.5%.
All I said when chatting over the phone was - I'm only interested if you give me the headline rate of 3.5% which they did.
Ps: the only debt we had other than 225k mortgage was the 6k remaining loan

annie_d

i just got the 3.3% from Sainsbury

20aday

I bank with Lloyds and last October they were quoting me APRs of around 19.9% for a loan of £7,500 over five years.

Tried with Tesco Bank (whom I've a credit card with) and received the headline rate.

Given the figures Lloyds were quoting me I was surprised to receive the rep. APR.... But I wasn't demanding to be in the 51% of successful applicants!